There is a lot of talk about Mobile Device Management (MDM) and its big promise to enterprises of centrally distributing applications, data and configuration settings to mobile devices. MDM services have incredible potential and deliver great value to IT department as it provides centralized application and hardware resource control. The control is effected by remote or over-the-air capabilities. It helps IT departments to optimize functionality and security and minimize (support) cost and downtime.

So yes it provides great value but does this all sound too good to be true? To a certain extend it does as there are some important “challenges”  to overcome before MDM will be ready for mass market adoption. The current high Total Cost of Ownership being a very important one, as enterprises will be hesitant to pay a high monthly cost per user/device. Also the user Experience is not always positive…..battery drains, difficult to set-up, device locks,…etc. And what about keeping up with the ever changing landscape of Device Operating Systems and Device (Configurations).

It will take time and hard work from many market players to overcome the challenges, also because the MDM market is still relatively untested and uneducated..  For the near future I expect Telecom Expense Management (TEM) Services to be combined with MDM. It will provide a powerful combination and provides strong value to IT department as it finally offers:

• Real time cost control – enabling controlling costs when they are actually made –
• Policy management…..e.g. block 0800 service numbers, this roaming call cost $4.25, automatic selection of preferred network, white and black list of applications etc.
• Fully automated Asset and Inventory Management and more real-time insight…..which user is using how much mobile data with which application, what are the most used applications.

Over time TEM and MDM will be an integrated offer and provides a powerful combination making life easier for enterprise IT departments to control cost and improve service management.

Recent research shows that two in three European companies have no clue what and how much corporate data is housed on employees’ mobile devices. Of those surveyed, two in three companies said they are not fully aware of exactly what sensitive data is stored on employees’ mobile devices and—perhaps more troubling—38 percent said they don’t even know what applications are being run by employees on their smartphones. Moreover, only 15 percent of respondents said that they are “completely confident” that they would be legally protected should an employee’s mobile device be lost or stolen and whatever data contained on the device fell in the wrong person’s or organization’s hands.

Troubling figures…. Smartphones keep employees connected to their work however from a security standpoint, this disconnect poses significant problems for companies that are torn between empowering their employees and locking down the sensitive data they must exchange to do their jobs. In addition to the corporate data there is a lot of valuable personal data on the employee mobile device (pictures, videos, applications, ringtones, personal address book,..) as lines have blurred between the professional and personal life. Employees will back-up this data locally on their computer or somewhere in the “cloud”, posing an even more challenging situation from a security standpoint. Throw in the mix the adoption of (mobile) applications, with the Apple Appstore leading the way in the enterprise/professional world, and the cost of transmission not being free (at best fair usage or roaming fees)….the situation becomes even more critical to resolve. Ignoring the challenge is not an option for most enterprises.

How to deal with this situation?

One could take a classical Strategy Planning Process and move in a top-down approach from objectives, situation analysis all the way to implementation and control. Personally I would go first for a quick-and-dirty baseline bottom-up assessment by using Mobile Device Management (MDM) tools to make an inventory of device-side data, applications being used, which data is being stored outside of the enterprise domain, and trying to investigate/understand (surveys) end user behavior/needs/trends. This data allows for insight on adoption within the enterprise, risk analysis, and future direction and needs. From this point on one can be an informed decision on what to do next and how to do it…….

Comprehensive telecom expense management (TEM) solutions have been shown to be highly effective in reducing telecom costs, generating strong ROI and paying for themselves in less than one year of operation. An automated invoice management system will generate hard dollar savings and productivity gains.

The value of reviewing invoices for accuracy before paying them is easy to appreciate. But for organizations that receive hundreds or thousands of telecom invoices every month, manually validating every charge on every invoice is a time-consuming and costly process. Whether deployed as an on-premise or outsourced solution, an effective TEM invoice management program includes four essential components: electronic invoice processing, invoice validation, dispute management, and contract negotiation.

Electronic invoice processing

Invoice management solutions are effective to the degree that the data is made available in electronic form. Invoices received in electronic form can be processed more rapidly, accurately, and at lower cost than paper invoices. Electronic invoices can also provide levels of detail that are critical for thorough and accurate analysis, validation, and allocation.

Invoice validation

To fully verify the accuracy of invoices, charges must be validated against three criteria:

• Usage – Were the services billed for actually consumed? Call accounting systems collect Call Detail Record (CDR) data off the telecom switch that can be used to validate costs. Wireless services do not provide this kind of activity log and are typically validated against charge thresholds.
• Contract terms and company policies – Rates applied to delivered services, as well as taxes and other charges, should be validated against terms defined in the carrier contract. Charged activity should also be checked against company policies governing appropriate use.
• Inventory and MACDs – The inventory of services in effect and the technology deployed are constantly changing. Invoices from telecom providers must be validated against what is essentially a moving target.

Dispute management

An automated dispute management system can help you quickly and efficiently work with carriers to achieve credits and/or corrections for discrepancies identified during the invoice validation process. Best-in-class dispute management systems include an automated workflow component that provides full lifecycle tracking of the disputed charges, including disposition, amount recovered, important dates, and more. Invoices with disputed charges can be paid in full with disputes or short paid.

Contract negotiation and optimization

Negotiating favorable rates and selecting service plans that match usage needs are powerful ways to reduce telecom spend. The spend and usage data collected for other invoice management efforts provides valuable insight that can be leveraged to reduce present and future telecom spend. Data gathered from invoice processing reveals how your organization actually uses telecom services, arming you with the information you need to negotiate the most favorable carrier contracts and wireless plans. Invoice management solutions with spend analytics capabilities can help you analyze this information and project future requirements and costs. Armed with this information, you can enter negotiations knowing exactly what you need, and what you can afford to leave on the table. You will be able to make informed decisions that result in significant cost reductions – such as moving to pooled plans or limited wireless data services – without jeopardizing overall quality of service.

Hard dollar savings and more

An invoice management system encompassing electronic processing, invoice validation, dispute management, and contract negotiation can generate immediate hard dollar savings, such as elimination of overcharges, as well as long-term savings resulting from stronger contract negotiation and compliance. Invoice management helps organizations understand and control their telecom usage and spend.

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• TEM services continue to be popular among enterprises as they are eager to reduce telecom expenses.
• The market for global capabilities is maturing – ahead of Gartner predictions.
• Demand in Europe is growing ; although the market is a couple of years behind the US, Gartner expects that 2009 and 2010 will be breakout years, as companies based in Western Europe start to adopt TEM services in greater numbers.

The US is still dominating the TEM space; this is also reflected by the providers reviewed in the research as almost 75% of the profiled TEM players are based in the USA.

Link to research http://www.gartner.com/DisplayDocument?id=1032315&ref=g_fromdoc

Key facts:

• Telecom costs continue to rise with an increase of 2,5% in 2008 compared to 2007
  • Strong increase in purchase of flat-fee bundles for both voice and mobile data
  • Data cost category continues to grow while smart phones become more popular
  • Number of mobile devices increase by 13%
• Private use of corporate mobiles is common
  • 28% of call costs are private
  • Holiday destinations are top roaming countries in July & August\
  • New Year’s Day and Bloody Friday (global stock exchange decline) are top days for SMS volume
• Regional Differences
  • Roaming continues to represent an important cost consisting 24-28% of the telecom cost in European countries, whereas USA is only 13%;
  • SMS and Service Numbers (Voicemail, Number Information) are most popular in the USA and UK, when compared to European continental countries (Germany, Netherlands).

Find all results here: http://www.ezwim.com/news/ezwim-telecom-monitor-2008

My take:

• Mobile/wireless cost are still on the rise;
• Enterprises follow the trends in the consumer markets; flat fee voice & data bundles grow strongly in popularity;
• Strong growth of mobile data usage are pushed by private usage; mobile data is being used, next to corporate email for downloading music, keeping in touch with social network and using YouTube, Twitter, MSN etc.

What to do?

• Get insight into what you spend and how you are spending it on a global level;
• Increase end user awareness of their private usage and make them responsible of their own private costs (private/business cost allocation), and create clear policies;
• Centralize cost and service management globally and automate the processes (Install, Move, Add, Change) with your service provider.

Is this a big surprise?  No!

As long as device manufacturers have a strategy of competing on design and providing consumers a Swiss Knife-like device (Technology/Feature push) to keep their Average Sales Price (ASP) high without developing an end-to-end service (device, software, network) with the end user in mind (only most relevant features, take away comlexity). Likewise most operators are deploying MDM tools, with a focus of firmware updates (>200 software bugs per launched device) and pushing the right network settings, to keep connectivity/data revenues going.

Basically the device manufacturers and operators need to change their business model from a technology/infrastructure push to an end-to-end service designed around the end-user. Both Blackberry and Apple have already provided the proof points that this is the way to go.

Question will be whether the device manufacturers and operators have the capability and competence to make this change over time…..

http://www.mformation.com/mformation-news/press-releases/95percent-of-mobile-users-would-use-more-data-services-if-setup-were-easier

Market consolidation in the TEM space is taking place and will accelerate. Why? Here are some reasons:

• Completeness of Product/Service
  The market is moving beyond being a national market to a global market, away from billing validation to full telecom lifecycle, from fixed to mobile…..
• Flawed Business Model
  Most vendors have their resources onshore and deploy a premise based model with high levels customization (no SaaS). Their ability to scale is limited and they face high CapEx and OpEx to maintain their service. 
• Limited Differentiation & Competitiveness
  Most US TEM players have limited differentiation and find themselves in a very competitive market place leading to high customer churn and high customer acquisition cost.
• Retreat of Venture Capital and Private Equity

Given the above considerations this implies a lot of the TEM vendor will simply not reach profitability leading to a shake out and companies looking for economies of scale. 

Consolidation in the TEM space – who is next?

http://www.tangoe.com/news-events/press-releases/tangoe-combines-with-information-strategies-group-isg.html 

http://www.controlpointsolutions.com/news-resources-resourcecenter.htm

Many TEM vendors have a national service and approach and must seek strategic partnerships (or build themselves) to be compliant to the enterprise trend moving away from national to global services. An example of this trend is the announcement of the global partnership between Ezwim and Movero Technology to deliver a joint lifecycle management service globally. The joint service is based on the full integration of the respective Software-as-a-Service (SaaS) platforms.

The integrated offering will be available in Q1 2009. The benefit to enterprises: a total lifecycle management approach for policy development, procurement, administration of services and expense management across multiple carriers, allowing for more effective cost control, service and support.

TEM players selected as finalists for Innovation of the Year include a.o. Ezwim, Visage Mobile and Asentinel. Stay tuned for the final winners that will be announced in February during the TEM 2009 conference in Orlando, Florida.

Looking at the discussion and decision-making around the EU Regulator is like watching Sergio Leone’s movie The Good, The Bad and The Ugly……my take on why it is not happening is the following:

National interests continue to prevail in the EU:

• Nordic countries have a considerable industry interest in mobile device/infra (read: Ericsson/Nokia); ess margin at the operator level will bring down their ability to subsidize handsets and allocate CapEx expenditures for infrastructure…;
• Southern European countries are top receivers of roaming income…
• Large European countries have dominant pan European operators and less interest in taking margin out of the industry, and this margin funds their acquisition spree in India, Eastern Europe and Latin America.
• The Netherlands – and some other countries – invested heavily in creating a leading edge ICT infrastructure compared to other EU countries, they are not interested in having EU interference with their national policies…… 

Is there a need?

• Market inefficiencies because of lack of competition? The GSM Association (Operators) have valid reason to question this argument, the Ezwim Telecom Monitor also showed little evidence that regulation improved price competition.
• Roaming & one common market argument, yes it would be very nice to pay the same at home or when being abroad. The ratio between retail pricing and true cost is in the 5-10x range, one could make an argue for more regulation;
• Billing Unitisation…..paying by the second as compared to rounding up to a minute. Yes one could regulate this item as an average call is 2.5 minutes and rounding up is pure margin to the operator, when taking into consideration a starting tarrif of let’s say 80 Eurocents this make the price per minute very high……and much higher then the regulated minute price. The question becomes how far do you want to go….and what counter measures do operators take (paying for voicemail, higher starting tariffs,…);
• Lack of Transparency…..also called Bill Shock…I have seen a monthly bill of 50.000 Euro on mobile data, as the person who got this bill thought it is was ok to use Skype and listen to Music Stations by using a mobile data card while being in roaming. Should one put a max. cap on certain spending or make tariffs more transparent? I consider myself as a an expert user and even for me it is not transparent (tariff structures, conditions, …) at all……any improvement in this area is a bonus.
• Spectrum Allocation / Next Generation Networks…

Taking the above into account….yes there is a need, but I suspect this situation will not change for years to come and EU citizens and enterprises will continue to pay too much for telecommunications services.